Online Course Guide of WHU –

Find all modules and courses of our degree programs.

Please use the filters below to select the term (spring or fall) as well as the respective program (BSc, MSc, MBA, Exchange, Doctoral) of your choice for an overview of all modules offered at WHU. The courses are listed under the modules. Please click on a module to see which courses are part of it. If you would like to find out more about a certain course, click on the name of the course to see detail information. The location of the lecture will be reveiled after your course registration on myWHUstudies.

Spring term counts from January - August, fall term counts from September - December.

Important for Exchange Students: As the Full-Time and Part-Time MBA Programs utilize a modular course structure, the dates on which students begin and end the exchange are flexible. Please find here a chronological overview of the preliminary course offering for Spring and Fall.

Spring 2019  ›  Bachelor of Science  ›  Bachelor of Science - 4th Semester  ›  General Studies II

Introduction to Bank Management

Course Code:
Prof. Dr. Axel Wieandt
Course Type:
BSc Course General Studies
Week Hours:
Spring 2019
(Please note that exchange students obtain a higher number of credits in the BSc-program at WHU than listed here. For further information please contact directly the International Relations Office.)
Session 1 and 2 – Fri (11.01.2019), 13:45 to 18:45, K-001 Hörsaal / Lecture Hall

Session 1 – Introduction to banking

■ Dermine (2014) chapter 1–4
‒ Discounting, present value, and the yield curve
‒ Coupon bond rate, zero coupon bond rate, forward rates, and the shape of the yield curve
‒ Statistics, a review
‒ The economics of banking, and a bank’s balance sheet and income statement

■ Freixas/Rochet (2008) chapter 1–2
‒ Microeconomics of banking, introduction
‒ The role of financial intermediation

■ Dermine (2014) chapter 16
‒ Securitization

■ Wieandt (2017) Part I chapter 2–4
– Europe's banking landscape / Banking – from the bottom up
– Bank's specialness, and the need for regulation, supervision, and safety nets

■ Optional reading: Hellwig/Admati (2013) chapter 1–4; Schmidt/ Hackethal/Tyrell (1999)

Session 2 – Banking crises and bank regulation

■ Acharya/Richardson (2009) Part I chapter 1–2
‒ Mortgage origination and securitization in the financial crisis
‒ How banks played the leverage game

■ Wieandt/Mönninghoff (2011)
‒ The financial crisis: observations and implications / HRE Case Study

■ Dermine (2014) chapter 12–13, 22, 29

‒ Capital regulation (Basel I), Economic capital allocation, and loan pricing I (the equity spread)

‒ Capital regulation (Basel II)
‒ The Basel III global regulatory framework for more resilient banks and banking systems
‒ Prudential regulations, safety nets, and corporate structure of international banks (branches vs. subsidiaries)

■ Wieandt (2017) Part III chapter 7‒8 and Part IV chapter 9
‒ Great Financial Crisis and early lessons drawn

■ Optional reading: Reinhart/Rogoff (2009) chapter 1, 10, 13; Hellwig/Admati (2013) chapter 5–10; Acharya et al. (2011) Prologue: A Bird´s Eye View; Blundell-Wignall/Atkinson (2010)

Session 3 – Bank valuation – Fri (18.01.2019), 13:45 to 18:45, K-101 Hörsaal / Lecture Hall

■ Dermine (2014) chapter 5, 6, 8
‒ The valuation of banks, part 1
‒ The valuation of banks, part 2
‒ Valuation of fee-based activities

■ Optional reading: Weiss/Wieandt (2000); Freixas/Rochet (2008) chapter 3.2–3.3

Session 4 and 5 – Thu (07.02.2019), 13:45 to 18:45, K-001 Hörsaal / Lecture Hall

Session 4 – Value-based management I

■ Dermine (2014) chapter 7, 9–10
‒ Economic and strategic drivers of bank valuation
‒ Value-based management in banking: an introduction
‒ Fund transfer pricing: foundation and advanced approaches

Session 5 – Value-based management II

■ Dermine (2014) chapter 11, 14, 15
‒ Deposit pricing and repurchase agreements
‒ Loss given default and provisions on nonperforming loans
‒ Loan pricing II, loan-loss provisions on performing loans, and estimates of probabilities of default

Session 6 – Risk management in banking – Fr (15.02.2019), 13:45 to 18:45, K-101 Hörsaal / Lecture Hall

■ Dermine (2014) chapter 17–19, 21, 24
‒ Risk management in banking: an overview
‒ The control of interest-rate risk on the banking book, part 1: the earnings at risk
‒ The control of interest-rate risk on the banking book, part 2: the economic value at risk
‒ Liquidity risk and value creation
‒ Marginal risk contribution, diversification, and economic capital allocation

Final Exam – Wed (27.02.2019), tba

Resit Exam – Wed (15.05.2019), tba

Friday, 11/01/2019
01:45 PM till 06:45 PM
Friday, 18/01/2019
01:45 PM till 06:45 PM
Thursday, 07/02/2019
01:45 PM till 06:45 PM
Friday, 15/02/2019
01:45 PM till 06:45 PM
Upon completion of this course, students will be able to:
  • Understand the peculiarities of valuing a bank, factors shaping the banking industry (e.g., regulation), and how this bears on value-based bank management
  • Apply key concepts of value-based bank management like deposit and loan pricing
  • Understand key concepts of risk management in banking
Basic Readings

■ Dermine, Jean, 2014: Bank Valuation and Value-Based Management: Deposit and Loan Pricing, Performance Evaluation, and Risk Management. 2nd edition. New York: McGraw-Hill
■ Freixas, Xavier and Jean-Charles Rochet, 2008: Microeconomics of Banking. Cambridge, MA: MIT Press
■ Acharya, Viral V. and Matthew Richardson, 2009: Restoring Financial Stability: How to Repair a Failed System. Hoboken, NJ: Wiley
■ Wieandt, Axel and Sebastian C. Mönninghoff, 2011: The Financial Crisis: Observations and Implications. zfbf, Vol. 63, pp. 508–530
■ Wieandt, Axel, 2017: Unfinished Business: Putting European Banking (and Europe) Back on Track. Göttingen: V&R unipress

Optional Readings

■ Hellwig, Martin and Anat Admati, 2013: The Bankers' New Clothes: What's Wrong with Banking and What to Do about It. Princeton, NJ: Princeton University Press
■ Schmidt, Reinhard H., Andreas Hackethal, and Marcel Tyrell, 1999: Disintermediation and the Role of Banks in Europe: An International Comparison. Journal of Financial Intermediation, Vol. 8, No. 1–2, pp. 36–67
■ Reinhart, Carmen M. and Kenneth S. Rogoff, 2009: This Time is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press
■ Acharya, Viral V., Thomas F. Cooley, Matthew Richardson, and Ingo Walter, 2011: Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance. Hoboken, NJ: Wiley
■ Blundell-Wignall, Adrian and Paul Watkinson, 2010: Thinking Beyond Basel III: Necessary Solutions for Capital and Liquidity. OECD Journal: Financial Market Trends, Volume 2010, No. 1, available at:
■ Weiss, Hans and Axel Wieandt, 2000: Value-Based Management in Banking: A European Perspective, Corporate Finance Review, July–August, pp. 16–25

Lecture, reading assignments
Written exam (80%): Exam format will follow the exercises at the end of the respective chapters in Dermine (2014); students are therefore encouraged to do the exercises in preparation for the exam; solutions can be found at the end of the Dermine (2014) book

Oral participation (20%): Students are expected to come to class prepared and put nameplates on display in the classroom